Business news and markets: as it happened - December 4, 2013

Companies across America added 215,000 jobs in November, the highest monthly
gain all year and well above economists projections of 170,000

The figures, from private payroll company ADP, will add extra significance to Friday's closely-watched government data on non-farm payrolls, which, if strong, will shorten the odds on a December taper.

Keep up to date with all the news at Telegraph Finance and we will be back in the morning with full, live coverage of the Autumn Statement.

In the meantime, thanks for following and all your comments.

Have a great evening.

The Autumn Statement

17.16 Tomorrow's blog will be focused on the Autumn Statement when Chancellor George Osborne will be delivering his speech at 11.15am in the Commons and we will be covering it live.

The Chancellor has set the scene for an Autumn Statement focused on balancing the books, with no big "giveaways" expected, though Osborne will be keen to ensure the Government is seen as improving living standards, while cracking down on tax avoidance.

There has been much speculation as to what we can expect and I have put together all of the predictions as to what will be announced which you can read here.

As part the speech tomorrow it is widely expected that the OBR - the Government's fiscal watchdog - will upgrade Britain's growth prospects on Thursday. We take a closer look at its previous projections. Take a look at how their previous projections have panned out here.

Wall Street wipes out earlier losses

16.38 It could be similar day in Wall Street as it has been in London. US markets are now up, having dipped when they opened just over an hour ago.

The Dow Jones is up 31.63 (0.2pc) to 15,946.25.

The broad-based S&P 500 tacked on 3.53 (0.2pc) to 1,798.68, while the tech-rich Nasdaq added 12.54 to 4,049.74.

Fresh jobs and trade data beat expectations, while a reading of non-manufacturing activity for November was disappointing.

Markets are expecting the US Fed to start tapering in its December meeting but maybe with the data suggesting the recovery is not so broad-based, they are rising at the slightest hint it could be pushed back.

Roll up, roll up - guess the outcome!

16.18 It has been an interesting, if not testing, day on the FTSE 100. It is start to resemble a carnival game, as William Nicholls, dealer at Capital Spreads, notes:

Half way through this morning the FTSE chart was starting to resemble a staircase, gently helping investors down to lower levels. At midday, things got worse and a phase of sheer panic ensued – for a moment, things were looking very hairy indeed.

Fortunately this afternoon’s string of US data has helped stop the rot and markets seem to have changed direction in dramatic fashion following the lead from across the pond. In a busy day of data, a combination of ISM non-manufacturing, new home sales, ADP employment change and trade balance seem to have convinced investors that the December taper is now less likely.

This is certainly an interesting time for markets and we are seeing increased activity from clients as a result. The game is to predict economic outcomes and correctly judge the adjustments in the markets – roll up!

FTSE 100 in Wednesday's trading. Source: Bloomberg

US services sector growth slows in November

15.56 Over to the US where the latest figures show that the US services sector did grow in November, but at a slower pace than the previous month.

The ISM purchasing managers index for the services industry fell to 53.9 from 55.4 in October, putting it at its lowest level since June.

Business activity, new orders and job creation all slowed last month even as the country pushed into the year-end holiday shopping and entertainment season.

Paul Dales, US economist at Capital Economics, said the slowdown was "disappointing" but "no big deal" as it is still consistent with the country's GDP and jobs growth in the fourth quarter.

The drop took the index back to a level last seen in May. But because the survey was surprisingly strong over the summer, it is still at a respectable level.

When taken together with the ISM manufacturing index (which rose to a 30-month high in November), the two ISM surveys appear consistent with annualised GDP growth of around 2pc in the fourth quarter and monthly payroll gains of about 180,000.

That’s pretty much in line with our expectations. The bottom line is that the economy appears to have a decent amount of momentum to take into next year.

Bettel Sworn In as Luxembourg Prime Minister

15.31 Luxembourg’s Xavier Bettel was sworn in as the country’s new prime minister, taking over the reins from Jean-Claude Juncker, Europe’s longest-serving leader.

Bettel, 40, head of the Liberals, was installed for a five- year term. Pierre Gramegna, 55, director general of the Chamber of Commerce, will be finance minister, succeeding Luc Frieden. Jean Asselborn will continue as foreign minister.

Herman Van Rompuy, president of the European Council has tweeted out his congratulations.

US trade gap shrinks to $40.6bn in October

15.16 The US trade deficit narrowed to $40.6bn in October on a strong rise in exports, according to figures from the US the Commerce Department.

The trade gap fell 5.4pc from September's upwardly revised number of $43.0bn. The October reading was in line with analyst expectations.

Analysts bullish on Consort Medical's innovators

14.47 Several analysts have increased their price targets for Consort Medical, a pharma company that designs and manufactures medical devices for drug delivery - like inhalers and injections. While its first half results, posted this morning, were strong and in line with expectations, it was the company's 16-strong team of innovators that the brokers are betting on.

Ingeborg Oie at Jefferies was particularly impressed with two of Consorts novel products - a syringe and an auto-injector, both of which she says "have unique features which have allegedly attracted customer interest already".

We were more impressed with the update on Innovation this time than the pipeline, even if the revenue opportunities from these innovative products are further into the future.

They are also spurred on by a significant contract win announced last week, when Consort said it had clinched an exclusive deal to manufacture an inhaler product called DEV610 for a "global pharma company". While the details are still scarce - the product is under development - the projected orders are substantial enough for Consort to be constructing a new manufacturing site to meet demand once it launches in 2015.

Wall Street opens in the red

14.36 US markets have opened down, following their European counterparts in reacting to the stronger-than-expected jobs numbers from ADP. The Dow Jones is down 0.32pc and the Nasdaq has slipped 0.29pc.

US employers add 215,000 jobs in November, highest all year

13.39 Companies across America added 215,000 jobs in November, the highest monthly gain all year and well above economists projections of 170,000. The figures, from private payroll company ADP, will add extra significance to Friday's closely-watched government data on non-farm payrolls, which, if strong, will shorten the odds on a December taper.

Speaking to Bloomberg Mark Zandi, chief economist at Moody's said:

Employers across all industries and company sizes looked through the political battle in Washington

If anything, job growth appears to be picking up.

Opec maintains oil quota

13.09 The Iran nuclear deal has not pushed Opec to lowering its oil production quota, as some had feared. Instead ministers from the Middle Eastern, Latin American and African countries which hold around 81pc of the world's proven oil reserves decided to renew for six months its 30 million barrel-a-day output cap for the first half of 2014.

But future meetings may be less straightforward. A number of factors are threatening to flood supply and drive the price down- namely the US shale oil boom and the easing of sanctions on Iran. Saudi Arabia, Opec's biggest producer, is likely to push for a cut in the quota at future meetings in a bid to keep the oil price above its preferred $100 per barrel mark.

Metro Bank ups cash call

12.36 Metro Bank, Britain's first new high street bank in a century, has increased its growth ambitions after strong investor interest, with directors deciding to increase its cash call by around £100m after a number of would-be investors urged the new lender to expand its £285m share offering.

The Follow-On Offer will be at the same price as the original, £13, and will consist of the sale of 7,692,308 A Ordinary (common) shares, raising up to a further £100m. This additional capital raise will be used to further support Metro Bank’s continued unprecedented growth in deposits, lending and accounts.

We expect to be able to fulfil all orders from existing shareholders from the current Offer which will close on 6th December. We then expect to be able to fulfil orders from new shareholders in the Follow-On Offer.

Clegg trumpets Lib Dem economic credentials

12.23 Nick Clegg is taking the stand at Prime Minister's Questions today while Dave meets schoolchildren in Chengdu. He's declared that "without the Lib Dems there wouldn't be a recovery".

Hewlett Packard cutting 1,100 jobs in UK: reports

12.18 ITV's Laura Kuenssberg says the Unite union is claiming that more than 1,100 jobs are under the axe at Hewlett Packard.

&lt;noframe&gt;Twitter: Laura Kuenssberg - Unite claiming more than 1,100 jobs going at Hewlett Packard including in Sheffield and Bracknell - trying to clarify&lt;/noframe&gt;

Royal Mail clinches union deal

12.12 Royal Mail has reached a "negotiators agreement" with the Communication Workers Union, which sources say includes an increased pay offer and "more money on the table".

The proposed agreement is still subject to approval by the executive of the union and then a ballot by members, and looks to have avoided any strike action over Christmas:

Royal Mail and the CWU have agreed that the union's ballot for industrial action remains valid. However, the CWU has confirmed that there will be no disruption through industrial action during the ratification process of the proposed agreement, including the whole of the Christmas trading period.

Britain's multimillion pound deal to ship pig semen to China

Britain has agreed to start shipping pig semen to China, in a deal worth millions to the pig industry.

Half of the world's pigs are in China and improving pig genetics is key to China as pig meat is one of their main sources of protein.

Officials said the deal was worth potentially £45m a year to British pig producers. Exports should start in the spring.

The news came after Britain managed to persuade China to open up the market last year for live pig imports.

Owen Paterson, the Environment secretary who is accompanying the Prime Minister on the trip, helped clinch the deal.

Mr Paterson has now turned his attention to finding a market in China for pigs' trotters, which are thrown away when the animals are slaughtered.

Pigs' trotters are viewed as a delicacy in China, and the Government estimates that the market could be worth £7.5 million a year to Britain if exports are allowed to start.

Reckitt Benckiser falls after UBS tells clients to sell

11.55 Over in the FTSE 100, consumer goods group Reckitt Benckiser has fallen 1.2pc after analysts at UBS told clients to "sell" the shares. Reckitt indicated in October that it could sell its pharmaceuticals business (RBP) and analysts at the broker reckon investors are too optimistic about a possible deal:

We believe RB's current valuation implies a much greater valuation for the RBP division than is likely to be released if the management opts for disposal, and the risks to RBP's profits after 2016 from the threat of a generic film buprenorphine are being overlooked.

An independent Scotland would bear cost of aging population

11.55 New analysis from the National Institute of Economic and Social Research projects that if Scotland were to gain independence, its average income tax would rise more than the

RBS chairman: fines are 'sobering reminder'

11.23 Sir Philip Hampton, chairman of Royal Bank of Scotland, has said the bank's €391m EU fine for Libor-rigging is "another sobering reminder of past failings".

EU fines six major banks €1.7bn

10.44 It's official. The EU has fined six major lenders a record €1.7bn over allegations their traders rigged financial benchmarks. The banks involved are Britain's Royal Bank of Scotland, Citigroup, Societe Generale, JP Morgan and broker RP Martin. Deutsche Bank received the single biggest fine at €725.36m.

Joaquin Almunia, the EU's top official for competition, said:

What is shocking about the LIBOR and EURIBOR scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other.

easyJet flies 2.7pc higher after upbeat note

10.40 Back in the stock market, budget airline easyJet has flown 2.7pc higher in a FTSE 100 that has drifted down 0.2pc. An upbeat broker note from Goodbody Stockbrokers, entitled 'an airline investment that won't keep you up at night', has boosted the low-cost carrier today, with analyst Donal O'Neill saying:

easyJet has consistently delivered ahead of market expectations in recent years and while the comparatives become increasingly tough in 2014, structural cost and revenue drivers should give management further opportunities to expand margins and returns over the medium term.

Infrastructure plans: "There really is a significant amount going on"

10.29 Lord Deighton is telling industry leaders about the infrastructure work done by the coalition to date. He says 45pc of the projects that have been announced by the government since 2010 are under construction, with lots already completed.

Industry leaders gather to hear infrastructure plans

10.20 Louise Armitstead is at the Institution of Engineers where the great and good of the industry are gathered this morning to hear Danny Alexander, chief secretary to the Treasury, talk about the government's infrastructure plans.

The venue is the Institution of Engineers, grand building in Wesminster which was the home of the engineer Thomas Telford (1757-1834).

Infrastructure plans: no shovels in the ground this side of 2015

10.13 The analysts are casting their beady eyes over the government's infrastructure spending plans, and a chorus of scepticism is rising. Nick Prior at Deloitte says the statement is light on details:

The additional infrastructure funding announced by the Chief Secretary today is welcome but we need much clearer sight of where this money will actually be spent.

The government guarantees scheme is making a difference. This has been the most impactful announcement on infrastructure to date. But, the reality is, little of this money will be spent this side of 2015, so we won’t see shovels in the ground on new projects for some time.

The £25bn commitment from insurers is good news in demonstrating the attractiveness of UK infrastructure to investors. But they still need to see a clear pipeline of opportunities to put their money into and this will require some upfront commitment and ongoing funding from government. The intention is there but the funding is still aspirational.

Mat Riley, Head of Infrastructure at EC Harris comments:

Today’s revised infrastructure spending programme is, again, strong on headlines, but unclear on delivery. The government is working hard to attract investors such as the insurance funds, but the UK still does not have the right policy environment for these funds to be put to good use and make a real difference, which is compounding the problem.”

Who would want to take the risk and invest in a nation that cannot even put together a coherent Energy Policy without fear of ridicule? Regulation is largely ineffective, and the balance of power now sits with asset owners and their investors, which means only one outcome for the consumer, and that is higher costs. Politicians are in denial, the real issue is how much cost consumers are ultimately going to bear, and by when.

Eurozone economy grows 0.1pc in third quarter

10.03 Economic growth in the euro area was confirmed at 0.1pc for the third quarter, a slowdown from the previous three months when GDP grew 0.3pc.

Treasury announces infrastructure spending plans

09.54 The Treasury has just sent out its plans for infrastructure spending. We reported the headline measures earlier but here are a few more from HMT:

- confirm that there will be no tolling on the planned A14 scheme between Cambridge and Huntingdon, construction of which is planned to start in 2016

- announce a £10m guarantee for new energy efficient lighting systems across car parks in the UK

- create a new court for infrastructure to avoid unnecessary delays in the planning process for major projects

- aim to make the UK a world centre for the testing and development of driverless cars.

- open a £10m competitive fund in early 2014 to test innovative solutions to deliver superfast broadband services to the most difficult to reach areas of the UK.

- build on the Spending Round commitment of £2.3bn capital investment for flood defences by developing a new long-term plan, including naming key projects by Autumn Statement 2014

Pound drops on services miss

09.42 Although the services sector is still growing at an "impressively strong" pace, according to Markit, the pound has taken a tumble on news of the miss -- economists had expected a reading of 62. As Kathleen Brooks of currency trader forex.com notes, the fall is probably down to "the prospect of the rocket-fuel boosting the UK economy starting to run dry".

Pound v dollar over last three days. Source: Bloomberg

UK services sector growth in surprise November slowdown

09.32 A key survey of the UK's services companies signals that growth eased in November. The Markit/CIPs PMI survey gave a reading of 60, a few notches below analyst expectations of 62 and down from October's 62.5. Still, the economists who compiled the survey were eager to point out that while this is a five-month low, that the sector is still expanding at a stellar pace. It completes the hat-trick for the UK private sector, following upbeat readings of the manufacturing and construction sectors.

Chris Williamson, chief economist at Markit, said:

When looked at alongside the upturns in the buoyant manufacturing and construction sectors, the three PMI surveys indicate that the pace of economic growth will have accelerated in the fourth quarter, rising to above 1.0%.

Job creation is also surging as companies report increasingly buoyant demand. Rising employment will help sustain the upturn through improved consumer confidence and spending.

There’s also scope for growth to pick up again in December. Measured across all three sectors, inflows of new business hit a record high in November, with demand surging from both consumer and corporate customers.

Sage tops FTSE risers after strong full-years

09.12 Sitting pretty at the top of the FTSE 100 leaderboard is Sage Group, with shares in the business software supplier up 8.3pc in the wake of full-year results. The company has impressed with a 4pc rise in adjusted revenues to £1.26bn, and a 12pc increase in underlying earnings-per-share to 22.27p. Analysts at Numis, who upgraded their recommendation on Sage to "add" this morning, said:

Sage's prelims are in line, but underneath the covers are much stronger than this, with 5pc second-half underlying growth versus 3pc consensus. This moves management's 6pc 2015 growth target from 'aspirational' (or even 'pie in the sky' to some of the extreme bears) to 'achievable'.

EU Commission to fine group of banks record €1.7bn

09.00 The total fine to be levied by European authorities against some of the world's biggest banks over allegations they rigged Libor and other borrowing rates is to be a record €1.7bn, according to Reuters.

Up to ten banks, including Royal Bank of Scotland, Deutsche Bank and Societe Generale are expected to settle cases as early as today.

FTSE 100 gets off to subdued start

08.38 It's a relatively muted start to the trading session for the FTSE 100, with London's benchmark index edging up just three points to 6,535 in early trade. Asia-focused bank Standard Chartered is the heaviest blue-chip faller so far this morning, dropping 4.2pc after telling investors that full-year income is expected to be flat.

Eurostar stake to go as Treasury unveils infrastructure plans

08.37 The Government is expected to announce plans to sell its 40pc stake in Eurostar today as it unveils its infrastructure spending plans for the next two years. The National Infrastructure Plan will contain more than £375bn of planned public and prvate projects to 2030 and beyond.

Other measures to be unveiled include:

- An agreement with Hitachi and Horizon to support the financing to build a new nuclear power plant at Wylfa, north Wales

- A further £50m will be allocated to redevelop the railway station at Gatwick Airport.

- The £1bn Northern Line extension to Battersea in south-west London will also be guaranteed by the Government.

- Funding for improvements to the A50 around Uttoxeter in Staffordshire to start no later than 2015-16.

- A £10m competitive fund to open in early 2014 to test ways to deliver superfast broadband to remote areas.

To oil the wheels, six big insurers, including Prudential, Aviva and L&G, have pledged £25bn of investment over the next five years. Danny Alexander, the Chief Secretary to the Treasury, and Lord Deighton, the former Olympics boss-turned infrastructure delivery chief, are presenting the plans at the Institution of Civil Engineers this morning.

Today's agenda

08.08 Here's what's coming up later:

9.30am UK econ Markit services PMI. Completing the trio of private sector surveys for November, economists expect this survey to show that growth in the UK services sector slowed slightly in November but is still strong.

10.00amEUecon Eurozone third quarter GDP. Forecasters expect the bloc to have expanded 0.1pc in the third quarter, a slowdown from the previous quarter.

2.30pmUK politics Northern Ireland's minister of finance will be quizzed by MPs on the Northern Ireland Affairs committee on the province's banking structure

3.00pmUS econ ISM non-manufacturing survey. Economists expect this survey of US services companies to show that growth slowed slightly in November.

3.15pm UK politics Cathryn Ross, chief executive of Ofwat, will be quizzed by MPs on the environment, food and rural affairs committee on water. Questions are expected to centre on rising water bills, after Thames Water told the regulator it would raise consumer bills by 11pc over the next five years to pay for London's new super sewer.

Corporate news round-up

08.02 Louise Armitstead has taken a look at this morning's company announcements in this morning's City Briefing email.

Sage Group has reported a 3pc rise in annual revenues and a 51pc jump in pre-tax profits.

Standard Chartered is due to issue a pre-close statement.

Roberto Quarta joins the board of Smith & Nephew today as non-executive director and chairman-elect. He takes over from John Buchanan in April. And the European Commission's decision on Microsoft's proposed acquisition of Nokia's Devices & Services business is expected today.

The company said that like-for-like sales in the UK fell by 1.5pc in the 13 weeks to November 23.

Outside the UK, Tesco also reported a decline in like-for-like sales in all of its nine international markets, with an 8.1pc drop in Ireland.

In Asia, which has previously been a strong growth market for Tesco, like-for-like sales fell by 5.1pc in the third quarter.

Philip Clarke, chief executive, said there were "continuing pressures" on household finances in the UK and this has made the grocery market "more challenging for everyone since the summer".

The comments from Mr Clarke are a warning to George Osborne, the Chancellor, that consumers' remain cautious despite the economy recovering.

However, Tesco is also losing customers to the discounters Aldi and Lidl, and is battling to overhaul its 3,000 stores around the country.

Osborne to cap business rate rises

07.32 The Chancellor is set to unveil measures to cap business rates at 2pc in England and Wales next year in Thursday's Autumn Statement, according to the BBC. Normally, business rates are linked to retail price inflation, which is currently running at 3.2pc.

However, he will stop short of a complete overhaul of the system, seen as wildly outdated by industry. Business rates are based on the value of the company's premises, which assumes that the physical size of a business is linked to its prosperity, an idea which jars with an increasingly online economy.

Australia's growth in 'sub-par' performance

07.27 The Australian economy expanded 0.6pc in the third quarter of the year, disappointing analysts even though it is still well ahead of its peers among the developed economies. Year-on-year, the economy grew 2.3pc in the August to September quarter, well below the 3.25 to 3.5pc that economists consider "normal".

Australia's economy survived the global slowdown well but more recenly has been hit by slowing demand for commodities from China. The Australian Central Bank has been responding accordingly by cutting rates, which currently sit at a record low of 2.5pc.

But it was weak consumer sentiment that was to blame for the latest set of disappointing figures - were it not for strong exoprts, the economy would have contracted in the last quarter.

Su-Lin Ong, a senior economist at RBC Capital Markets, said:

It very much confirms the idea of an economy that is running around sub-trend pace and has a number of challenges.

It's supportive of a mild easing bias. The Reserve Bank is obviously reluctant to cut further but if you've got sub-trend growth and very well behaved inflation, there's got to still be scope to move if necessary.